U.S. District Judge Carl Barbier has granted a hotly contested motion to create a fund that could eventually reimburse plaintiff attorneys for their work in the Gulf of Mexico oil spill litigation over the objections of several parties to the case. Barbier's order does not actually award "common benefit fees," or the amount of money that the committee of plaintiff attorneys pressing the case for the benefit of all claimants would get to compensate them for their time and expenses.

Rather, it sets up a fund that would ultimately pay such fees, should they be awarded, and requires defendants and states in the case to begin holding back a percentage of any settlements as contributions to the fund.

A percentage of settlements reached through the Gulf Coast Claims Facility, the $20 billion fund administered by Washington mediator Kenneth Feinberg, will also be required to be contributed to the fund.

"The Court does not at this time decide whether to award common benefit fees or expenses to the PSC (plaintiffs steering committee). Those matters are reserved for another day. But, it is necessary to establish a mechanism to create a fund that could potentially be available to pay such fees and expenses if and when deemed appropriate. Before any such awards are made, there will be adequate due process given, with notice and opportunity to be heard on issues relating to any request for disbursements from the common benefit fund," Barbier wrote on Wednesday.

In its request in early November, plaintiff attorneys argued that since the case began, some 340 attorneys from 90 law firms have invested over 230,000 hours of time and spent $11.54 million of their own money to press the case.

Other parties to the case had countered that it was inappropriate to move toward reimbursing plaintiff attorneys before the Feb. 27 liability trial has even begun, and that it was inappropriate for people who settle their grievances outside of court through the Gulf Coast Claims Facility to be forced to contribute.

The reserve account issue was also the latest in the BP litigation to highlight discord within the State of Louisiana in dealing with the case.

Earlier in the litigation, Gov. Bobby Jindal's office hired its own attorney in the case, and that person serves on the plaintiff steering committee, while Attorney General Buddy Caldwell's office argued that it should not have to work through the committee of plaintiff attorneys because of sovereignty issues. The attorney general's argument was rejected, Alabama's attorney general was appointed to work with the plaintiff committee as coordinating counsel for state interests, and Louisiana's chief legal officer has found himself outside the major lines of debate. Meanwhile, the state has been castigated by the court for falling behind on producing documents relevant to the case while other parties have kept up with the rigorous schedule necessary to prepare for trial.

In this instance, the Attorney General's office objected to the creation of the reserve account, while the Governor's office said it had no objection to the creation of the fund, as long as certain categories of recovery for the state were exempted from fees, and the Governor's office further reached an agreement to work together with the plaintiffs committee.

Barbier did not have kind words for the Attorney General's office, and noted that the Governor's office had to step in to ensure that documents were produced. "The Court has on multiple occasions encouraged the State of Louisiana to cooperate with the PSC and the State of Alabama insofar as their interests are aligned versus the Defendants in this complex MDL (multi-district litigation). Rather than cooperate or attempt to work collaboratively, the State of Louisiana, through its retained private counsel, has instead often obstructed and frustrated the progress of the litigation," Barbier said in his order.

In his order, Barbier required defendants in the case to hold back 6 percent of any settlements reached on or after Nov. 7, including settlements through the Gulf Coast Claims Facility. The requirement does not apply to settlements reached between defendants. Information about settlements will be confidential.

Barbier noted that the plaintiffs steering committee has worked hard to improve the claims settlement process through the Gulf Coast Claims Facility by getting partial court supervision of the process, a government audit, translation help, and formalizing legal representation issues. "Considering the unique circumstances of this case, it would be unfair to allow parties to benefit from these activities of the PSC, but avoid contributing to the commen benefit fund simply because they are able to settle directly with the GCCF and avoid filing a claim in the MDL (multi-district litigation)," Barbier wrote.

The 6 percent reserve requirement would also apply to cases that are seeking to be severed from the proceedings in federal court and go back to state court.

Some 4 percent would be held back from any gross settlement with state or local government claimants.

The trial in the April 2010 explosion and sinking of the Deepwater Horizon oil rig, which killed 11 men and unleashed a torrent of oil in the Gulf of Mexico, will unfold in three phases next year at federal court in New Orleans.

The first phase, which begins Feb. 27, will focus on events that led to the explosion and the actual explosion and sinking of the rig. It is expected to last for several months.

The second phase, which is scheduled to begin in July, will focus on efforts to shut down the renegade well and quantify how much oil escaped into the ocean.

A third phase on liability issues dealing with cleaning up the oil, burning the oil and applying dispersants.

Rebecca Mowbray can be reached at rmowbray@timespicayune.com or 504.826.3417.